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Many industries are feeling the big hurt these days, and two that are getting hardest hit are real estate development and office furniture. So how does one local real estate developer manage to sell many of his units before they are built? And how is it that a hybrid office furniture-construction company was named by Entrepreneur Magazine as one of the country’s fastest growing companies of 2008?

Celadon, the latest project from residential development company Mosaic Properties, makes full use of a trend that has been around since the 1980s: new urbanism, which focuses on building walkable communities — keeping amenities like grocery stores, parks, work and fun all within walking distance (or at least a short drive) of home.

Workstage, a joint venture between Steelcase Inc. and New Jersey-based commercial real estate developer Gale International, is a design/build developer that takes an owner’s project from the design stage to the move-in stage — making it a turnkey operation.

According to Whatis.com, “turnkey” refers to “a product or service that is designed, supplied, built, or installed fully complete and ready to operate.”

“Before we even talk about what the building is going to look like, starting at the beginning of the process, we really focus on the work that’s going to take place inside the building with the people who are going to work there,” said Workstage CEO and president Rick Yeates.

“From the inside out, (we) start working on the building and what it will look like and what kind of materials. That’s really kind of a different approach.”

Yeates said that by approaching a building from the inside out, the company is able to create a more personalized atmosphere. While the company has experienced solid growth due to this unique niche, it also has had to fight to create awareness.

“The challenges that we might have is that it’s so unique and we’re a small firm … that we have to spend time to get that message out and communicating that difference to our clients. Once we do, it’s pretty effective from our perspective,” said Yeates.

Despite a failing economy, the almost 9-year-old company has found success.

“Our model gets clients in usually 15 to 20 percent quicker than traditional construction, but we also have great metrics on lower energy costs and all the productivity … that kind of customer model, not everyone appeals to that but there’s a good segment of the market that does. That’s No. 1,” said Yeates. “No. 2 is we’ve never been a speculative design builder slash developer — meaning, like Donald Trump, you go out and build a building and they will come. I think those two aspects have allowed us to be focused and go across the country and find clients even in this downturn.”

While Workstage offers a more direct example of a turnkey operation, Mosaic’s Celadon also offers turnkey services. It scales the turnkey model to the size of a town by keeping amenities close to home. While individual homes and retail spaces do not come furnished, Mosaic does offer expertise from professional interior designers to help residents style their new homes.

“The benefit of living here and working here is, for us, we’ll be able to live here, walk down to have coffee, lunch. Back here, there’s a little area we can have a picnic area, there’s a fire pit,” said Brad Rottschafer, president of Mosaic Properties, while moving his finger over a bird’s-eye-view map of the property. “It’s all about the community and how we integrate with these outdoor spaces. Our attracted market is people who consider living downtown, but want a more unique spot with green space.”

Even though Celadon is the company’s first new urbanism project, Mosaic Properties has been studying the method for the past 12 years. Rottschafer said along with keeping things within walking distance, it’s also important to put an emphasis on design. The combination seems to be working. Since constructing the roads into the 22-acre community, 35 properties have been reserved or sold out of an eventual 125 properties. These range from town homes, single family, commercial and retail spaces, to live/work settings with residential space on the top and storefront business space on the main floor.

The down economy kept some people from buying, said Rottschafer, due to not being able to sell their current homes. In an interesting twist, however, the economy has provided some benefits. Lower construction costs and interest rates, Rottschafer believes, will keep prices low and motivate buyers.

“The other thing I think will help stimulate things are these low interest rates. We’re starting to see a lot more activity. Right now is the time to buy, with the rates and our construction costs down,” said Rottschafer. “We’re like everybody else: We follow the market and compete against everything else.”

Residential units range from $135,000 to $400,000. The wide price range helps stabilize sales by appealing to a diverse group of people.

“We don’t have 300 of the same property. We only have 19 (single family homes) to sell. We only have 22 lofts to sell,” he said. “If you had 120 single family lots right now, it would be tough.”

Of the seven residential lots completed, five had been purchased at the time of the interview. Rottschafer said there were a couple of new urbanism projects he used as inspiration, one being Seaside in Florida. Built in 1981, Seaside is credited for being the first such development. Houses that originally sold in the $100,000 range are now worth more than a million dollars, said Rottschafer.

Rottschafer believes Mosaic will do more new urbanism projects in the future, but noted that they are very difficult to pull off due to the turnkey aspect of coordinating all the different spaces in a way that flows.

“There are not a lot of people that can pull it off. It takes a lot of effort,” he said. “It’s almost an ecosystem: How do you get this thing to work as a community? It’s a lot easier to say, ‘I’m going to build 150 of these similar homes.’ We see it as something people are going to want in the future, and not a lot of people are going to be able to deliver a quality product.”

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